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07 November 2006
07. November 2006 Company

Ad-hoc release, 8 November 2006. EADS 9m 2006 results. EADS 9-months results reflect record deliveries and challenges ahead


  • Revenue growth across all Divisions to € 27.5 billion (9m 2005: € 23.4 billion)
  • EBIT* of € 1.4 billion (9m 2005: € 2.1 billion)
  • Announced A380 delays weigh on Group’s third quarter EBIT*

EADS’ (stock exchange symbol: EAD) results for the first nine months of 2006 reflect high delivery levels throughout the Group as well as anticipation of the challenges ahead. From January to September 2006, EADS increased its revenues across all Divisions by 17 percent to € 27.5 billion (9m 2005: € 23.4 billion). The Group achieved an EBIT* (pre-goodwill and exceptionals) of € 1.4 billion (9m 2005: € 2.1 billion), a reduction attributable to the A380 delays and the US Dollar devaluation against the Euro.

The rescheduling of the A380 delivery plan in early October overshadowed the progress in the A380 type certification process as well as Airbus’ record nine-month deliveries of 320 aircraft. Louis Gallois assumed the additional responsibility of the Airbus CEO to drive forward the further development of Airbus, conduct the new programmes requested by the market, and carry out the “Power8” cost and cash saving programme together with a more efficient integration at Airbus and EADS levels. Eurocopter achieved significant successes and sold 471 helicopters – already exceeding all previous full-year order intakes. The Space Division more than doubled its order intake while the Defence & Security Systems Division obtained contracts to build digital radio networks in Germany and Estonia.

All Divisions contributed to the strong increase in revenues. Airbus and Eurocopter benefited from a significant increase in deliveries of commercial aircraft and series helicopters. The Defence & Security Systems Division’s growth was supported by the expansion of the digital radio network business. The Space Division’s revenue increase was fuelled by the Ariane 5 production ramp-up and progress in the secure satellite communications business. The Military Transport Aircraft Division’s revenue increase resulted from the achievement of four milestones in the A400M programme.

The combined revenues of EADS’ defence businesses amounted to € 5.9 billion (9m 2005: € 4.9 billion).

In the first nine months EADS’ EBIT* was € 1.4 billion (9m 2005: € 2.1 billion). EBIT* suffered from already announced A380 delay impacts, a less favourable hedge rate and higher Research & Development (R&D) expenses at Airbus. Hedges were maturing at an average rate of € 1 = US$ 1.11 (9m 2005: € 1 = US$ 1.04). Additionally, losses at EADS Sogerma Services weighed down the Group’s EBIT*. These impacts were partly compensated by significantly improved contributions from Airbus’ series production programmes and the Group’s helicopters, defence and space businesses.

In the first nine months of 2006, self-financed R&D expenses amounted to € 1,691 million (9m 2005: € 1,431 million). This increase was mostly due to aircraft programmes and an increased Research & Technology effort.

EADS’ reduced Net Income of € 848 million (9m 2005: € 1,271 million), or € 1.06 per share (9m 2005: € 1.60) mainly mirrors the Group’s EBIT* development.

Free Cash Flow including customer financing stood at € -153 million (9m 2005: € 1,502 million), reflecting a substantial build-up of working capital. Free Cash Flow before customer financing amounted to € -695 million (9m 2005: € 1,419 million). At the end of September 2006, the Net Cash position stood at € 4.8 billion (year-end 2005: € 5.5 billion). The acquisition of BAE Systems’ 20 percent stake in Airbus took place in October and will therefore be accounted for in the fourth quarter of 2006. The impact of this transaction on the Net Cash position will be a reduction of € 2.75 billion.

In the first nine months of 2006, EADS’ order intake amounted to € 25.7 billion (9m 2005: € 38.8 billion). Eurocopter (order intake up 87 percent) and the Space Division (order intake up 130 percent) benefited from a very strong commercial momentum.

At the end of September, EADS’ order book stood at € 236.5 billion (year-end 2005: € 253.2 billion). Contributions from commercial aircraft activities are based on list prices. The order book decrease versus year-end 2005 mainly results from high delivery levels and a € 11 billion impact due to revaluation at the less favourable €/US$ exchange rate. The Group’s defence order book stood at € 52.6 billion as of 30 September 2006 (year-end 2005: € 52.4 billion).

Outlook 2006

Based on the expectation of 430 Airbus aircraft deliveries in 2006 and strong contributions from its helicopters, defence and space businesses EADS is set to achieve revenues of well above € 37 billion for the full year as announced on 27 July 2006. EADS withdrew its previously provided 2006 EBIT* and Free Cash Flow guidance on 3 October 2006. As already announced, EADS will not issue an updated 2006 outlook until further notice.

Nevertheless, due to the seasonality of all EADS businesses except from Airbus, the EBIT* of Military Transport Aircraft, Eurocopter, Space and Defence & Security Systems Divisions is traditionally stronger in the fourth quarter than in the previous quarters of the year.


EADS uses EBIT pre-goodwill impairment and exceptionals as a key indicator of its economic performance. The term “exceptionals” refers to such items as depreciation expenses of fair value adjustments relating to the EADS merger, the Airbus Combination and the formation of MBDA, as well as impairment charges thereon.


Michael HaugerEADS
Tel.: +49 89 60 73 42 35

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